The Dutch government intends to prohibit payroll and staffing agencies from deploying highly skilled migrants (from outside the EU) in the future. These entities will no longer be eligible to act as recognized sponsors. The reason: loan-out constructions are deemed âvulnerable to abuseâ under the highly skilled migrant scheme, according to Minister Faber (Immigration and Migration) in a letter to Parliament.
Focus on Knowledge Workers Essential to the Dutch Economy
As announced in the coalition agreement and on Budget Day, the government plans to tighten the highly skilled migrant scheme. The goal is to specifically target knowledge workers essential to the Dutch economy while combating potential abuse.
The scheme allows employers to attract knowledge workers from outside the EU. However, its low-threshold nature has led to misuse. Reports from the Immigration and Naturalisation Service (IND) and the Dutch Labour Inspectorate highlight abuses such as sham arrangements or exploitation, including non-payment of agreed salaries. Minister Faber emphasizes that the triangular relationship between staffing agency, client, and highly skilled migrant often results in insufficient oversight of working conditions, leaving migrants vulnerable.
Stricter Rules for Recognized Sponsorship
Employers wishing to hire highly skilled migrants must be recognized as sponsors by the IND. Currently, recognized sponsors are allowed to deploy highly skilled migrants through staffing or payroll arrangements. The Netherlands has 277 recognized sponsors primarily engaged in âloaning outâ activities, employing 6,520 highly skilled migrants (7% of the total).
However, Minister Faber argues that the sponsorship framework is intended for actual employers who directly benefit from the migrantâs presence and maintain oversight of their activities. Therefore, she proposes to exclude recognized sponsors from loaning out highly skilled migrants commercially, with a few exceptions.
Exceptions to the Rules
Loaning out highly skilled migrants will remain permissible in two specific situations:
- Temporary situations during sponsorship recognition: If a client is awaiting approval as a recognized sponsor, for example, during mergers or acquisitions.
- Innovative start-ups and scale-ups: Start-ups that cannot yet meet all recognized sponsorship requirements but require specialist knowledge. The Netherlands Enterprise Agency (RVO) will assess these companies and advise the IND.
In these cases, the highly skilled migrant will receive a residence permit for a maximum of two years.
Additional Conditions and Obligations
Recognized sponsors that continue to loan out highly skilled migrants will face stricter conditions, including:
- Reporting obligations: Sponsors must provide details about the actual employer and reasons for the loan-out arrangement when applying for a residence permit.
- Mandatory updates: Any changes in the situation must be reported to the IND.
- Contact requirements: If a sponsor loses contact with a migrant, this must be reported immediately.
A duty of care will also be introduced to establish chain liability and ensure oversight of working conditions.
Impact on Staffing and Payroll Agencies
These stricter measures apply to all entities that provide labor under the Allocation of Labour by Intermediaries Act (Waadi). This includes staffing and payroll agencies, which will generally be prohibited from deploying highly skilled migrants to other parties.
This marks the end of staffing or payroll services for highly skilled migrants. The regulations will become stricter, but it remains unclear how and when they will take effect.